Compliance Briefing — March 6, 2024
The SEC adopted final climate-related disclosure rules, requiring U.S. registrants to report governance, risk management, and material climate impacts with phased assurance over greenhouse gas emissions.
Executive briefing: On March 6, 2024, the U.S. Securities and Exchange Commission adopted its final climate-related disclosure rule. The rule compels public companies to disclose governance, strategy, and risk management related to climate, report material financial statement impacts, and provide greenhouse gas emissions metrics with phased assurance for larger registrants.
Immediate compliance priorities
- Materiality assessment. Determine which climate risks and opportunities materially affect the business and require disclosure across Form 10-K and registration statements.
- Emissions data readiness. Prepare to capture and assure Scope 1 and Scope 2 emissions (and Scope 3 where material and previously disclosed), aligning data quality controls with assurance requirements.
- Financial statement integration. Map climate-related expenditures, capitalised costs, and estimates to new footnote disclosures.
Control alignment
- Governance. Enhance board and management oversight documentation for climate risks, including committee charters and reporting cadences.
- Internal controls. Extend SOX controls to climate metrics, ensuring documentation, segregation of duties, and change management for data systems.
- Disclosure controls. Update disclosure committee procedures to review climate narratives, metrics, and assurance provider conclusions prior to filing.
Enablement moves
- Develop implementation roadmaps aligning SEC compliance dates with CSRD, ISSB, and other jurisdictional reporting to leverage common data sets.
- Engage independent assurance providers early to scope readiness assessments and evidence expectations.
- Coordinate investor relations messaging on climate risk strategies, transition plans, and resilience metrics.
Sources
- SEC press release announcing adoption of the climate disclosure rule
- SEC Final Rule: The Enhancement and Standardization of Climate-Related Disclosures for Investors
Zeph Tech supports U.S. registrants with climate disclosure programme design, controls integration, and assurance coordination aligned to the SEC’s final rule.
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